Offshore Trusts Report: British Virgin
Islands

Legal Framework and Formation Rules

BVI Trusts are formed under the Trust Ordinance 1961 (based on
the English Trustee Act 1925), as updated and amended by the Trustee
Amendment Act 1993, and the subsequent Trustee Amendment Act, 2003.
Since the 1993 Act, there is no requirement for registration of
trusts in the BVI, and there is no public disclosure of information
regarding trusts. Trust duty is payable on each trust instrument,
which is achieved by buying and affixing stamps, creating no record.

BVI trusts are exempt from all taxation provided that there is
no resident beneficiary and no BVI assets.

Due to the Amendment Act, the regime for trusts in
the BVI is very flexible. The following are some of the main features
of BVI trust law:

the proper law of a trust can be specified by the trust instrument;
in the absence of a specified jurisdiction, a trust will be
under BVI legislation if the trustee or the trust administration
is situated in the BVI;

trusts can migrate into and out of the BVI; but outwards
migration is only possible if the 'receiving' jurisdiction
recognizes the validity of the trust;

purpose trusts are permitted in perpetuity and must have
at least one BVI trustee (resident professional or equivalent);

the perpetuity period can be set at 100 years, but 'lives
in being' is still possible;

'wait and see' provisions are included as standard;

'protectors' are explicitly permitted, and their powers are
clearly defined;

forced heirship provisions are excluded;

trustees may be given wide discretionary investment powers.

The BVI's trust regime was substantially updated in 2004 with the
following three pieces of legislation. In addition, new laws on
private trust companies came into force on January 1, 2007.

British Virgin Islands News

BVI To Review Taxes And FeesMonday 15/3/2010British Virgin Islands Prime Minister, Ralph O’Neal has said that the territory
will run a budget surplus during 2010, although the government still intends to review indirect taxes and fees on financial services.

Caribbean Explores Fiscal CooperationTuesday 9/3/2010Ahead of the World Bank meeting, to be held on March 11-12, where CARICOM Finance
Ministers will meet to discuss challenges that the region faces, CARICOM Secretary
General, Edwin Carrington said it was vital for Caribbean economies to increase economic cooperation and remove fiscal barriers, for the prosperity of the region going forward.

OECD Reports On Its Progress With International Tax StandardsWednesday 20/1/2010According to the Organization for Economic Cooperation and Development, the focus of the Global Forum on Transparency and Exchange of Information is now shifting – from commitments and agreements to achieving an effective implementation of the standards.

UK's Wealthy Head For Sunnier Climes As Tax Storm BrewsWednesday 16/12/2009New research would appear to confirm that, while not quite the 'exodus' popularly characterized in the press, there is nevertheless a steady stream of wealthy financiers, entrepreneurs and bankers leaving Britain as a result of the Labour government's recent tax increases.

BVI Signs TIEAs With China And IrelandWednesday 9/12/2009The government of the British Virgin Islands took a further step on December 7
to conclude Organization for Economic Cooperation and Development model Tax Information Exchange Agreements, signing texts with Ireland and China.

Crown Dependencies Welcome Foot Report FindingsMonday 2/11/2009The British Crown Dependencies have welcomed the findings of the UK government's review
of the dependencies, published on October 29, which recognizes their economic benefit to the United Kingdom, and efforts to achieve compliance with international
standards.

BVI Makes OECD White ListMonday 17/8/2009The British Virgin Islands has signed its 12th Tax Information Exchange Agreement after concluding an agreement with New Zealand, meaning that the jurisdiction is now considered to be "substantially" in compliance with the Organization of Economic Cooperation and Development's tax snoopers' standard.

BVI Signs OECD Model Agreements With Nordic StatesWednesday 20/5/2009The British Virgin Islands government announced this week the signing of bilateral
tax information exchange agreements with the six Nordic countries, the Faroe Islands,
Finland, Greenland, Iceland, Norway and Sweden at the Icelandic Embassy in Copenhagen,
Denmark, on May 18.

The Offshore Trusts Guide Newsletter

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